Amazon is testing hand-scanning payments
Recently the New York Post reported that Amazon is testing a new in-store payment technology designated for their WholeFoods grocery chain. The new payment method does not rely on cards or phones, but rather on scanning the user’s palm.
What is palm vein scanning?
To be fair, palm vein scanning is nothing new and has been around for many years. The market has not adopted this technology mainly because of the high opportunity cost (hosting a biometric database of vein patterns) and the inability to use this authentication method online as opposite to cards and phones. So why is Amazon suddenly placing a bet on this ancient tech?
Side note: The consumer retail price for palm vein scanners is higher than the one for POS card readers. Fujitsu is offering one of their models for around 462 USD while Verifone is charging about 199 USD for a POS card reader. It is not clear to what degree wholesale prices shift the balance between the two or how leasing the devices might change the economics. The main hurdle for any payment provider was having to create a database of biometric vein patterns and connect it to payment schemes.
Why palm vein scanning?
Palm vein scanning comes with two major benefits. It is secure and very fast! The scanner is looking for a vein pattern in the user's hand. Each human has unique patterns and also left-hand patterns are unique to right-hand patterns. On top of that, the scanner is looking for active blood flow in the veins, which makes the technology very safe because a severed hand is of no use…
From a velocity point of view, it is important to mention that the user does not have to physically touch the scanner to have their vein pattern analyzed. The customer can simply waive the hand above the scanner and the payment is done. This could pose an opportunity to avoid long queues in supermarkets. Also, using an authentication method for payments, which generally is not associated with payments feeds into Amazon’s vision of a supermarket where payments do not exist.
In January 2018 retail giant launched Amazon GO, a supermarket that has moved payments into the background.
However, state governments in the US have passed laws that make cashless supermarkets illegal because they discriminate against low-income individuals and children who do not have cards, smartphones or bank accounts. Palm vein scanning could be yet another try to make payments as seamless as possible.
Currently, New York based Amazon employees are testing the scanners internally. The company hopes to have them installed in a few WholeFoods chains by the beginning of 2020.
